Mladjan Dinkic, head of the URS Parliamentary Group and representative of the submitters, pointed out that decentralisation demands that local self-governments depend less on state budget transfers, that they have strong local finances, which is achieved by the proposed amendments and modifications to the Law. It also envisages that the bulk of the income of municipalities and towns, 80%, be garnered from the citizens’ income tax.

The decreased transfer from the state budget also means that the city of Belgrade, as the wealthiest, completely suspend the transfer of funds from the state budget, that the more developed towns receive half the current transfers, and that the poorest, third and fourth category municipalities receive the same amount of transfer, as well as the newly-established solidarity transfer (budget savings achieved from the decreased financing of the wealthier local self-government units).

The address of the representative of the submitters Mladjan Dinkic was followed by a debate of the Committee members on the issue of local self-governments’ capacity to successfully discharge their duties and the issue of achieving the planned effect of the fund transfers envisaged by the Bill. The representative of the submitters and the Committee members agreed that decentralisation is an important state issue which should not be politicized, but rather the best solution should be sought.

Following the debate, the Committee members accepted the Bill amending and modifying the Law on Financing of Local Self-Government, in principle, and appointed Committee Deputy Chairman Mihailo Puric the Committee’s rapporteur to the National Assembly session.

In the continuation, President of the Standing Conference of Towns and Municipalities Sasa Paunovic stated that the Bill allows the local self-government more funds and more freedom to spend them, but that the proposed manner of transfer from the citizens’ income tax is questionable as it is a less secure source than transfer from the republic budget.

The sitting was chaired by Committee Chairman Jovan Palalic.